Bernstein: “If Cryptos Are Considered Securities…”

Asset management firm Bernstein evaluated the implications of direct application of securities laws to crypto. Bernstein said in a research report that direct enforcement of decades-old securities laws could result in certain cryptocurrencies being classified as securities.

The real issue, according to the report, is whether countries should use the securities law framed decades ago to categorize crypto tokens without realizing the efforts of blockchain networks to transform existing financial systems. However, analysts led by Gautam Chhugani wrote that the view that all tokens other than Bitcoin (BTC) are securities leaves no room for blockchain networks to achieve decentralization over time and for tokens to have a functional utility within the network.

Bernstein said in a report last week that the question of whether crypto tokens are securities or commodities is at the center of lawsuits filed by the U.S. Securities and Exchange Commission against crypto exchanges Binance and Coinbase. The regulator announced in a statement that it is suing Binance, its founder Changpeng Zhao, and the operating company of Binance.US for alleged violations of federal securities laws. A day later, he sued rival exchange Coinbase on similar charges.

The core issue, according to the report, is to transform countries’ securities laws framed decades ago, where the purpose of blockchain networks is to transform decades-old financial and securities market systems with greater transparency, instant payment times, elimination of intermediaries, automation and lower costs, global liquidity and interoperability. whether or not to use it without realizing it.